State aid: Commission approves €216 million Romanian scheme to support small and medium sized companies affected by the coronavirus outbreak

The European Commission has approved a €216 million (RON 1.043 billion) Romanian scheme to support small and medium-sized companies (SMEs) affected by the coronavirus outbreak. The scheme was approved under the State aid Temporary Framework. Approximately €207 million (RON 1 billion) of support will take the form of guarantees on factoring products (with recourse against the seller) and approximately €9 million (RON 43 million) will take the form of direct grants to cover fees related to the guaranteed factoring products. The aim of the measure is to help SMEs address the liquidity shortage they are facing due to the coronavirus outbreak and to ensure that they have diversified financing channels. Only factoring products issued between 26 August 2020 and 30 June 2021 are eligible under the measure. The Commission found that the Romanian scheme is in line with the Temporary Framework. In particular, with respect to the guarantees on factoring products: i) the guarantee may not exceed 50% of the factoring products; and ii) the guaranteed factoring product has an initial validity of 12 months that can be prolonged up to a limit of 48 months, but without any discretion from the granting authority. With respect to the direct grants, the maximum amount per beneficiary will not exceed €100,000 per company active in the primary production of agricultural products, €120,000 per company active in the fishery and aquaculture sector, and €800,000 per company active in all other sectors. Both guarantees and direct grants are channeled via financial intermediaries, and therefore safeguards are in place to ensure that the aid is entirely passed on to the final beneficiaries. The Commission concluded that the scheme is necessary, appropriate and proportionate to remedy a serious disturbance in the Romanian economy, in line with Article 107(3)(b) TFEU and the conditions set out in the Temporary Framework. On this basis, the Commission approved the scheme under EU State aid rules. More information on the Temporary Framework and other actions taken by the Commission to address the economic impact of the coronavirus pandemic can be found here. The non-confidential version of the decision will be made available under the case number SA.58462 in the State aid register on the Commission’s competition website.